You've been a friend and colleague for many years. It was only yesterday that i discovered that we both share a common challenge with penmanship. I had never noticed jack's signature, and when this was highlighted yesterday in the press, I considered rescinding my offer to appoint him. Jack assures me that he is going to work to make at least one letter legible. In order not to deface our currency. Obama having some fun with his new pick for treasury secretary, jack lew. Let's talk go that and the serious issues he'll deal with on the roundtable joined by begg from the wall. Caller: Al hunt from the bloomberg view, david walker, and paul krugman of "the new york times" and princeton. I'm going to take a stab at trying to explain this trillion dollar platinum coin issued right at the beginning so we can then debate it. It's rooted in 1997 law. You see the law right there that gave the president the ability to -- the mint the ability to do commemorative platinum coins. What they didn't do is set a limit on how much it could be worth so the idea was you get a coin like this, a mock-up right there. Deposit it in the federal reserve. dollars and would extend the debt limit for about a year and the government would be able to go on. The white house earlier in the week did not close the door on this and bubbled up through the blogosphere, but, paul krugman, you got everybody's attention on friday when you wrote in "the new york times" "what we all hope of course is that the prospect of the coin or some equivalent strategy will simply take the debt ceiling off the table. But if not mint the darn coin." 24 hours later, the treasury department said no way. It's not going to happen and closed the doors. Make the case for why you were for it. The thing you have to understand, the debt ceiling is a fundamentally stupid and -- but dangerous thing. We hav that tells the president how much he must spend, tells him how much he's allowed to collect in taxes. He says okay there's a difference there. I've got to borrow it. No, you can't borrow it. So the whole debt ceiling thing itself is a crazy thing and forces the president to do something illegal. Either to defy congress on what it told him to spend or defy them on borrowing and told him not to and have the weird loophole which everyone agrees is crazy. But is a loophole that says that the secretary of the treasury can mint a coin for any amount which is supposed to be for commemorative pieces but does avoid -- does offer a way to bypass this and all that's really doing is the way to bypass the debt ceiling. It isn't even printing money but saying, hey, we're going to say that we minted the coin. You don't even have to mint the thing, just say you did, right? Well, you would have to but -- nobody ever has to see it. Say we did it and the federal reserve says, okay, you now have a $1 trillion bank account which we will, when you withdraw funds from that, we will sell off some of our government bonds which is just a way of borrowing through the back door but it gets you past the craziness of the debt ceiling. That's not going to happen, and ben bernanke weighed in heavily. You've been around it for awhile. The debt ceiling is a crazy thing. We need to reform that. We don't want to use it as a political tool. But, you know, the trillion dollar coin is a dumb idea too. Two dumb ideas don't make a good one. Why would you spend it on buying platinum. I have a few trillion dollar bills here. Why would we want to waste money -- illegal. You're legally allowed to -- you're not allowed to do that. Not allowed to pass it, that's right. That's right. But gets you, peggy noonan, back to the drawing board. And the white house is saying this platinum coin is not going to happen. Yeah. Democrats in the senate want the president to examine all kinds of ways around facing this question head on, but it appears that the president has ruled all or most of them out. Yeah, nobody actually knows what's going to happen. This is about the third -- this is the second debt ceiling crisis we've had in the past few years. We just got through the fiscal cliff thing. It is very strange to live in a great, sophisticated, wealthy, modern democracy and have this herky-jerky crisis cliffhanger thing that is going on and that has been for awhile. Look, I am always hopeful for something like a grand bargain but I think that won't happen now. I think we have more loggerheads, more brinksmanship ahead of us. The white house position, which is right, is that there should be no bargaining over this. If the republican majority in the house wants to cut spending, let them propose legislation that cuts spending and pass it. Not hold america hostage. And saying we -- this rejecting -- from the white house. -- Was a sign of strength, not weakness that we are not bargaining, we are not going to give in but the onus rests firmly on the republicans. They think they mean it. Whether they actually do, we'll find out. Al hunt, in "the wall street journal," karl rove laid out a strategy asking republicans that they should do exactly that. Pass the bill, which actually cuts spending by as much as they want to extend the debt limit for. What a lot of people point out if you extend it for a year, a trillion dollars, that's hard to get. 218 votes for. Karl is about as good here as he was in ohio on election night. Peggy's advice was much better than karl rove, the republicans, they can talk all they want to. You know, years ago, george, i had a young -- I was a young reporter, veteran congressman named jimmy burke who said my success here? He said I vote for every tax cut. I vote for every appropriations and I always vote against the debt ceiling. I say, if everyone did that, it would be anarchy. He said, what do you think this place is, on the level? That's what these guys are doing, total, complete fraud and in the end republicans are not going to want to say we'll put the full faith and credit in the united states at risk, so we can cut medicare. That just won't happen. That's what people are betting on. That's exactly what republicans are betting on. We went to the well. We let the president get what he wanted on the fiscal cliff. But when it comes to the debt ceiling, he's going to have to cough up some spending cuts and they are saying they are prepared to go to the brink on this even if it means, you know, questioning the full faith and credit of the american government. But, yeah -- look, the republicans need to wake up and get real. We're the only country on earth that has a debt ceiling limit. Ultimately as part of a grand bargain we ought to get rid of it and we ought to substitute statutory budget controls and the constitutional credit cart limit, the gdp but in the interim if the republicans wasn't to use leverage they ought to use it on the sequester and continuing resolution. Right on the heels -- we should not allow this to become thought of as a legitimate or normal budget strategy. This is hostage-taking. This is saying walk into a room saying I've got a bomb, give me what I want or I'll blow up this room. This is not something -- this has never happened before and should not be allowed to happen. Doesn't it mean it will happen now for the first time given the positions that each side has taken and what -- let me ask you, paul krugman, what are the economic consequences of that? It's incredibly scary. This is much scarier than the fiscal cliff, much scarier than any of the other things out there because we don't know what it does. What we do know is u.S. Government debt is the global safe asset. It is what every financial transaction relies on as the ultimate. This is what value consists of and better than gold, better than anything. U.S. Treasury bills are the thing, and if they are no longer, if they're called into question, nobody knows what happens. Somebody actually agree. Yes, here's the issue. I used to be a trustee of social security medicare. Social security is now negative cash flow. If you hit the debt ceiling limit, you can be at the point where at the beginning of the security checks on time. The last tame we got social security reform was 1983. Why? Because we weren't going to send the checks out on time. Let's get real. But they are going to back down. That's why in the end they -- sounds great now. You think they're definitely going to do it. I think he'll go up to the brink and get cold feet and go to the sequester which comes up right after. I think the battle will be waged over that. This is the losing proposition. Peggy. I think it should be noted we have a president. I think it should be noted that he should be sitting down and talking with those who would move -- attempt to move forward -- good point. -- On spending. I consider it unusual that this president can never make a deal with those folks. But this is not something to negotiate over. You do not negotiate with hostage-takers. That's the white house position. They're right about that. You just don't negotiate on this. You can negotiate on the sequester. You can negotiate on taxes but not on someone about to blow up the economy -- my goodness. That appeared to be the white house attitude on the fiscal cliff a month or two ago. Why can nothing ever be worked out? We do have a president. We do have legislative leaders. We do what should be n a spending crisis in america. It is not an eccentric thing to worry about the amount of spending that america does. The income, the outcome and the long-term promises. This is really -- this is a doomsday -- this is really saying, I will blow up the world unless you -- don't negotiate on that. And, again, the white house position is, look, congress passed these bills. They're the ones that appropriated this money that we're talking now about cutting back. We're talking about cutting spending and they're saying it's in their yard, they are the ones who need to bite the bullet. Meanwhile, also ask the broader question of the strategy. Peggy noonan, I was struck by your "wall street journal" column yesterday. You say "it's pirate time for the gop, wave a sword, grab a rope and swing aboard the enemy's galleon. Take the president's issues, steal them. They never belonged to him. They're yours." Elaborate. Go for it. First of all, don't be the depressed gray-suited gaggle that comes forward in the halls of the house once a day. His speak and sort of in a furtive and sad manner about what's going on. That no great themes ever emerged. Nothing ever seems to get said. Look, this is a time to remember in a way the joy of politics. The republicans are in a bad position right now. They just lost a big election. They are a bunch of folks in washington. The president is one man with a mike. That man, the president, can always overpower them. My feeling is this is a wonderful time to be daring and surprising. Go to the populist right on economic issues, on issues like breaking up the banks and the carried interest loopholes. Go for immigration. Don't wait for the president. I know. I'm just here to amuse. I have a sense of who funds politics, and maybe that's not a good thing. It's not just politics. It's what you do after you leave politics. Fine. Why don't we face that? I mean just when it's pirate time, I mean remember you're there for the people. Try to do good stuff. Do not giggle. It's no time to be cynical. A brilliant -- I thought it was a brilliant, a brilliant provocative column. There's not a chance it'll happen because it's a good -- but tea parties ran in 2010. We are anti-wall street. We are against the banks. They got in there. They got in the financial services committee, and guess what, they started getting money from jpmorgan and from morgan stanley and not a single one of them voted against the banks. Immigration, why did mitt romney turn into an immigration basher? He never was before, because he went to iowa in 2007, the base, the core, they are going to have a terrible problem with this because their base -- except it isn't hard-boiled politics going to push the republicans into working with the president in some fashion immigration. I know marco rubio talking about laying out a step-by-step -- for sure on immigration. Marco rube yore. There are republicans who say, look at what happened in election 2012. The president got 70% of the -- 71% of the latino vote, the handwriting is more than on the wall. A significant number of republicans want to move, but, george, there are also a lot of republicans who are not ready to move. They can't abide the idea of a pathway to citizenship for those illegal immigrants to get in the country. Can I note, by the way, the republican base, what you say fairly about the republican base in 2007, 2008, '12 was true. But that not base, not only the party establishment t the base just experienced a big loss. There's a lot of thinking on the republican side about the meaning of this and how to go forward. I know you wanted to run on these big financial issues. How is pirate strategy consistent with a get real strategy? The biggest deficit the country has is a leadership deficit and the truth is the wings of both parties don't represent america. We have a republic not representative to the public. That's one of the reasons I'm one of the national co-founders of no labels to get that over rhetoric. We do need more leadership over the president and have a plan and push forward with regard to a grand bargain strategy because we desperately need one. We need one in 2013. We may not have until 2015. I'm confident we don't have till 2017. Coming off the fiscal cliff negotiations and the whole experience with that, is that realistic at all in 2013? I think it is realistic if you do three things, one, the president has to demonstrate much more leadership. He's the only one elected by the people. He's the chief executive officer. He's got the bully pulpit. Secondly, we need to engage the american people with the facts, the truth, with the tough choices in a way forward. I've done it all over the country, all 50 states. They're way ahead of the politicians. They can handle the truth and willing to accept tough choices and, thirdly, you need to have people work with the president on a constructive basis recognizing that the people want this done. Let's talk about the president's team right now. Because the president did appoint jack lew, the treasury secretary this week leaving a big vacancy as chief of staff and that appeared in "the new york times" showing the president meeting with his economic advisers, seemed like a lot of men, all men, actually valerie jarrett is right in front of the desk. You can see her ankle, i believe. But that plus a lot of questions about the president's team, whether there's sufficient diversity in his cabinet and in his white house including from congressman charles rangel. It's embarrassing as hell, we've been through all this with mitt romney, and we were very hard on mitt romney with his women binder, the variety of things, and I kind of think there's no excuse in a second term. Judy woodruff, the team points out 47% of the administration is still women. About where president clinton was but the appearance of having all white men in those big jobs and eric holder as attorney general did rankle. Well, and the fact that the president got double-digit support among women, second election in a row, he did very well with the women vote and optics, which you said -- you were talking about something else, the optics, but the reality of the administration. Their argument is, hey, we didn't do a great job of getting it done early. We've been distracted with things like the fiscal cliff but when all is said and done, this is an administration that will look like america. Having said that, george, maybe they ought to take a line from mitt romney, binders full of women. They need to get moving and there are some jobs that are open and we'll see who they pick. I think we're all watching. What happened in the past few days with the women in the white house is all fair. If that had been a republican white house, I think we would agree they would be clobbered for not having enough women. I think the message has probably been received by the obama white house. I think at the end of the day, it's always good to have more women in the room. I suspect they will. And, al hunt, one of the other strains of criticism is that the president -- and i guess you want people who agree with you for the most part but the president is choosing from a relatively small pool. Pretty interesting that the president, the vice president, the secretary of defense designee and the secretary of state designee all served together on the senate foreign relations committee. He turned upside down that concept four years ago. I think the people who he picked are very capable but let me take the economic team for a second. I think jack lew is an enormously capable person as are other people but you know something, george, these people are tired. They are exhausted. They have been through one battle after another. When you talk about hillary clinton being spent, being exhausted so are these people and they're not bringing in any infusion of new people with new ideas. Not necessarily replacements but sit at the table and say how about this? And they're now talking about PUTTING denis McDonough whose sole experience is in foreign policy as the white house chief of staff. There's never been a successful white house chief of staff who did not have washington political experience. Dennis is on president obama's staff and security adviser -- solely on foreign policy and doesn't know political washington, and if they do that, I think it raises questions about -- that at no point in this administration have there been serious representation of what you might call the progressive economist wing, which is a pretty big part of obama's support. Maybe jared bernstein. Jared bernstein. Now he's off the list and that's a little surprising, both given who brought him to the party and also the fact that that wing has been right about everything so far. Right about interest rates and right about -- I don't have a problem with jack lew. Seems like he's a tough negotiator. That's what you need in the treasury -- he's been questioned -- when you bring it up with the white house, what they say is we do have vigorous debates on the inside. It may look, you know, monolithic from the outside like we're all -- but there are differences. They talk to people from outside. They do, and they say the president is talking to more people on the outside than -- surprising what matters and i think paul's point, they also promise to bring in a corporate ceo if they haven't done that and an eclectic group of people that maybe can inject -- we're having the same familiar faces. Hard to convince someone to take that job. I think al is right, we need to get some new blood in there sitting at the table, makes a big difference. Jack is clearly qualified for that job and I believe he will get confirmed but doesn't have good relations with republicans and if you want to get -- that does -- want to make progress -- no, no, there's differing degrees. If you want to make progress -- biden negotiated that deal with senator McCONNELL AND WILL ISSUE HIS Report on gun control. There's a remarkable state of the state speech this week including this one from governor dan malloy in connecticut. In the midst of one of the worst days in our history, we also saw the best of our state, teachers and a therapist that sacrificed their lives protecting students. And when it comes to preventing future acts of violence in our schools, let me say this, more guns are not the answer. Peggy noonan, newtown happened one month ago tomorrow. We're going to see and hear from vice president biden on tuesday. But we've been talking about this the last few weeks on the program. Every time I talk to a group of senators, it does seem that there is not a lot of sharing of the president's sense of urgency on this issue. On capitol hill, you mean? Well, look, guns are a very tough topic in america. I do think that if the vice president comes forward with some -- with his report on tuesday that looks at the whole violence problem in a way that includes guns and extended magazines and such, but also how we deal with the mentally ill in america and what to do if you have a 17-year-old kid who appears to be unstable, unviolent, there's a cultural angle to this, and we all know what it is, we all go through the motions on it. We have for 25 years, but a democratic president addressing the cultural part of this would be a little like nixon to china. So if biden has something to say that touches on all those things, I think it would be -- I think he'll address all of them. What I am told is they are going to put out what they call a comprehensive package that will include legislation, it's going to include executive -- things the executive branch can do on its own and include the assault weapons ban, steps on back -- comprehensive background checks. They're going to look at the mental ill and other steps. They understand they're not going to get all of that but they feel -- I mean, I had one person close to the white house say how can we not try for the assault weapons ban. How can we have another mass shooting come, and, by the way, george, I talked to a southern senator just yesterday who said his son, grown son, happened to be in jacksonville, florida, middle of last week a wednesday morning at 10:00, went into a gun shop to buy his wife a shotgun, 10:00 in the morning, middle of the week. He said the ore was filled, five deep with people, stood in line with 20 people or more to buy -- he said, he said ever since sandy hook, there's just been this burst of -- all of -- -- interest in guns. Showed that huge, huge spike in sales of assault weapons and we have to take a quick break.

This transcript has been automatically generated and may not be 100% accurate.

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